State interventions and the shopping gluttony of oligarchs strangle independent media
This article comes from The Buzz Around the Ballot edition of Visegrad Insight 2/2017 devoted do media landscapes and disinformation in Central Europe. Read full contents page here.
A decade ago, traditional publishers in the Visegrad region had thought that their major challenge was going to be keeping their print editions on life support until they found an ideal online model to sustain their business. Yet, the escalating state pressure on media in Hungary and Poland as well as the shopping gluttony of oligarchs buying up media outlets in Slovakia and the Czech Republic has intensified the struggle of critical independent media in the region while simultaneously keeping freedom-of-the-press watchdogs on alert.
Viktor Orbán turned Hungary into a laboratory for dismantling liberal democracy with free press becoming the first victim of this experiment, which ended up being successful for Orbán’s Fidesz and disastrous for the power balance, media pluralism and the civil society.
On a similar track of illiberal democracy, Poland has taken a lot of inspiration from Orbán and waged what it calls the “repolonisation of media,” riding on the notion that domestic owners are better suited to informing the Polish public because critical, foreign-owned media is working on undermining the government. An amorphous foreign adversary to harm Polish, Hungarian and even Slovak interests has been important ammunition of populist governments.
Yet, the so-called new “domestic” owners are often not the traditional publishers, but rather oligarchical groups tangled in a cobweb of power interest while seeking a redistribution of influence over politics.
Public media in Hungary and Poland have relapsed to often serving as external PR departments of their governments when it comes to news reporting. In Hungary, many privately owned stations either replaced political news reporting by jolly entertainment or simply joined the governmental chorus line.
The governments in Slovakia and the Czech Republic have not made the notion that the state is the best master for public media an official media doctrine, but are not ready to give up their influence over the public media channels. For example, the Radio Television Slovakia (RTVS) has seen more than 15 directors since independent Slovakia emerged in 1993. Directors have changed more frequently than governments, an indicator that Slovakia has never managed to achieve a truly independent public media.
DOMESTIC DOES NOT NECESSARILY MEAN BETTER
Murky businesses tried to buy themselves into important media even before the oligarchic shopping fever started a decade. The global financial crisis further tightened the grip on many newspapers that saw their advertisement revenues sinking.
At first, foreign investors were most likely to abandon their investments in print media, due to the dropping circulation numbers and absence of viable online business plans.
When Penta, an investment group with a bad-reputation in Slovakia, started buying media in the region, the official explanation for going into this challenging segment was that they wanted to consolidate the media and seek new business plans for the newspapers. Only very few journalists in the purchased publishing houses actually believed that Penta was buying media to help finance their critical watchdog role.
In fact, oligarchs have been buying media to redistribute influence and balance the power of other oligarchs who already owned media. They looked at media as a so-called “nuclear suitcase” as a Penta top manager described it in an interview, which presumably should discourage all who might want to harm Penta business interests.
The redrawing of the Czech and Slovak media map has often made ownership non-transparent as some oligarchs did not finance the media directly but through different mediators and even trust funds. Back in 2015, more than 90% of Slovaks were unable to name the correct owner of top media in Slovakia, according to a survey by the Focus polling agency done for the Transparency International watchdog.
A SHORT GUIDE TO THE SLOVAK MEDIA OLIGARCHY
The most influential media abandoned by traditional publishers in Slovakia are mostly owned by financial groups or businesspeople with power interests, who are already sponsoring parties. The two major competitors are two oligarchical groups: Penta, which have built the News and Media Holding (NMH) company to shelter its media acquisitions, and J&T, which is entangled with the second most popular commercial TV channel TV Joj.
J&T also assisted in 2010 in the sale of the heavily pro-governmental daily Pravda, when it was bought by businessman Karol Biermann. However, who actually feeds Pravda with cash remains greatly unclear.
Penta’s NMH has digested media houses Spoločnosť 7Plus, Centrum Holdings, Trend Holding and Trend Representative now controlling a number of newspapers and internet websites including one of the best-selling weeklies Plus 7 Dní, the daily Plus Jeden Deň, and the economic weekly Trend. It employs approximately 450 people.
Andrej Babiš, a Slovak oligarch with the highest political ambitions in Czech politics, maintains influence over a number of key media though trust funds. Babiš has a file in the archives of the communist secret police ŠtB as collaborator, which he has denied. He is tied to media house Mafra, which officially owns the Slovak economic daily Hospodárske noviny. In the Czech Republic, Mafra publishes the dailies Mladá fronta Dnes and Lidové noviny.
The information that additional private broadcast media – specifically one of the largest private broadcasters, Markíza TV (owned by American CME) – might be for sale excites the oligarchs. Local media relying mostly on unconfirmed information already reported that those standing in line for Markiza might include Penta, Czech oligarchs Peter Kellner and Andrej Babiš as well as a group of Chinese investors.
Even if so far there is only speculation, the prospect of any Chinese ownership keeps media watchdogs rather edgy as this would bring a completely different control “culture” to the media market with an unpredictable outcome for media freedom. Nevertheless, Penta cannot buy Markíza directly as Slovak laws do not allow cross ownership of print and broadcast media. But the law never really stopped oligarchs from combining ownership of any media through mediators and investment funds.
The most closely watched media acquisition of Penta came in 2014 when the oligarchs, using a mediator, purchased considerable shares in Petit Press, home to the daily SME, one of the flagships of critical reporting in Slovakia. In response to Penta’s unfriendly and rather non-transparent entry to the publishing house, a large part of the SME newsroom left to establish an independent daily Denník N, which has since then become an important critical voice to the media market.
After a series of complicated negotiations, Penta withdrew to a minority position in the publishing house. Petit Press’s publisher, Alexej Fulmek, relies on the majority owner PSIS – one of the very few remaining traditional media owners – to guarantee the conditions necessary for independent journalism. Over the past three years, SME has resisted oligarchical influences and remained a decisive critical and independent voice on the Slovak media market as well.
Moreover, earlier in 2017, Penta sold back an additional 5% of its share to Petit Press. However, as part of the deal, Penta acquired the ethnic Hungarian daily Új Szó, which raises concern if some bulky cash might not persuade the oligarchs to sell the daily to Viktor Orbán’s buddies.
THE CHALLENGES AND THE HOPE
Oligarchs often fail to understand that they simply cannot run media as real estate investments, bakeries or meat processing companies. Turning news production into an assembly line often demoralises journalists as their integrity can be easily interpreted as a hindrance to running a successful business.
The past decade has shown that the presence of oligarchs in media houses has often eliminated media independence and challenged the reputation of even previously trusted media. When the ownership structure allows editors and reporters to remain independent, it might still take a while to produce evidence that the respective media has remained a critical voice by exposing any doubtful activities of the in-house oligarch. Editors have to eliminate mechanisms that might prompt self-censorship in the reporters. Also, there is a much stronger pressure on media co-owned by oligarchs to remain in the black as their ability to make money for their own operation sometimes draws limits to their freedom.
Thus today, investigative journalism focusing on busting high-level government corruption as well as critical voices explaining the true nature of illiberal democracies are gaining even more significance. New innovative online projects that can swim around nets of state control and oligarchs are a source of hope. A huge responsibility lies with the remaining traditional media, which serves a wider readership, to maintain their critical voice and independence, regardless of their ownership structure. It eventually distils down to the integrity of editors and journalists and their commitment to independent, fair and critical work.
Beata Balogová is the Editor-in-Chief of SME.
In cooperation with Heinrich-Böll-Stiftung e.V., Office Prague. The opinions expressed in the contributions are those of the authors and do not reflect the positions of the Heinrich-Böll-Stiftung.